COMUNICACIÓN ENTRE UN HMI CON UN PLC

Researches about Islamic banking have been done since some decades ago and a hundred of the results have been published. Various problems related to the banking have been explored, either those related to the law perfectives or others. In addition, not only do qualitative-based researches but also quantitative-based ones have been undertaken throughout the world. Moreover, the currently modern methods, such as statistical and econometric models, have also been utilized to examine such the researches. Among the researches are those examining its relationship in terms of economic and monetary sides, such as the variable of interest rate.

As stated previously in the chapter one that there are three important questions will be answered or investigated in this research. The first is about the islamicity level of Islamic banks’ operation in Indonesia. The writer views that there is nearly rare research investigating specifically the problem. However, several researches that related to the problem have been done and published. Because the yardstick of such the islamicity is the volume of PLS financing and the interest dependency, one of the researches related to the problem is what has been done by Chong and Liu (2009).

The research, exploring Islamic banks in Malaysia, reveals that the volume of PLS financing is only a negligible portion, while the essential financing of Islamic banking is the PLS financing. In addition, it is known, in theory, Islamic banks must avoid themselves from the existence of interest

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rate, however, the fact shows that Islamic deposits are not interest-free. Besides, the research of Hakan and Gulumser (2011) is in line with such the above result.

According to the performance of Islamic banks, Haron’s (2004) is one of the important researches that explores the performance of Islamic banks and the variables influencing them, in which it inspects the variables determining profitability of Islamic banks. The research, by using the econometric method of VAR and the data from several selected Islamic banks in the world, results that the variables determining the profitability of Islamic banks are divided into two categories, viz. internal and external variables. The variables that have significant influence towards the profitability of Islamic banks, according to the research, consist of inflation, assets structure, liquidity, volume of deposit and money supply.

It is in line with the Al-Jarrah's research. The research is to explore the profitability of the Yordanian banks during the 2000-2006 periods, which reveals that inflation and money supply are the most important external variables determining the profitability of the banks (Al-Jarrah, 2010). In addition, the internal variables considered to influence the profitability are such as the loans to total assets ratio, the operating expenditures ratio, the capital structure, the deposit ratio and non-operating expenditures ratio. Nevertheless, according to Zeitun (2012:53), inflation has negative correlation with the bank’s profitability.

Another research in terms of the profitability determinants is what Akhtar did in the Islamic banks of Pakistan. With the period of 2006-2009, the research shows the

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profitability has a long-term correlation with the bank size, ratio of debt equity, assets, NPLs ratio, CAR and operating

efficiency (Akhtar et al, 2011:128).Besides, by employing the

Generalized Least Square (GLS) and the data from foreign and local Islamic banks in Malaysia for three years (2007-2009), Idris's research (Idris et al., 2011:1) includes capital adequacy, credit risk, liquidity, bank size and management of expenses, nevertheless, only the bank size is positively significant in determining the profitability.

Also, a narrow-scope research has also been done in terms of exploring the determinant variables influencing the profitability of an Islamic bank, which is such as what Izhar and Usutay did in the Indonesian Islamic banks. With the data from Bank Muamalat Indonesia, an Islamic bank operating firstly in Indonesia, during 1996-2001, it is found that profit in the bank has been dominantly gener./,lated from the activities of financing, not the activities of service. The research also concludes that there is the positive relationship between inflation and profitability. However, it reveals that three sources of funds are negatively related with profitability of such the Islamic banks (Izhar & Usutay, 2007)

According to the effects of interest rate towards the performance of Islamic banks, there is a research conducted by Hakan and Gulumser (2011:1) which shows that Islamic banks in Turkey are visibly influenced by interest rates. The research is to utilize the data period of December 2005 to July 2009 with Vector Error Correction (VEC) as the method of analysis. The research concludes that any changes in the interest rates will affect both the deposits and the loans of conventional as well as Islamic banks in Turkey.

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Besides, another research in terms of the rate’s effect towards Islamic banks nearly has the same result. The research done by Yap and Kader (2008) is to investigate the impact of interest rate changes on the performance of Islamic and conventional banks in terms of demand for deposits and financing. The research, employing monthly data from 1999 to 2007 of the Malaysian Islamic banks, finds that there is a shifting effect on financing in the Islamic banks, in which a rise in the base lending rate would induce customers to obtain financing from the Islamic bank and vice versa. Moreover, the research concludes that Islamic banks in the dual system are exposed to interest rate risks despite operating on interest-free principles.

Concerning the determinants of deposits, there are several researches undertaken previously to explore the factors or variables influencing the deposits of Islamic banks. One of them is what Rachmawati and Samsulhakim did in the Indonesian Islamic banks. Rachmawati et al. (2004) found that the number of the mudharabah deposits scheme in the Indonesian Islamic banks does not depend on income and interest rate, but depend upon the rate of profit sharing and the number of the Islamic banks’ offices branch.

Ali et al. (2012) tested Rate of Return (ROR), Gross Domestic Product (GDP) and Inflation Rate (INF) towards Investment Deposits in Malaysia. The result of the research confirms that ROR has strong correlation with the deposits, in which their correlation is positive. However, the other variables, GDP and INF do not have correlation with the deposits. In addition, Saleh (2015:14) undertook a research exploring the factors determining deposits of five Islamic

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banks in Kedah Malaysia. The research employing the monthly data from 2000 to 2010, resulted that the rate of profit, interest rate and production growth have significantly correlated towards deposits of such the Islamic banks.

Another study examining such the research is also conducted by Haron and Ahmad (2000). The result of their research shows that there is negative relationship between the interest rate of conventional banks and the volume of funds deposited in interest free deposit facilities. In addition,

Almejysh and Rajha (2014:179) conducted research

investigating the deposit’s determinants in the Islamic banks in Saudi Arabia. The result reveals that there are five important factors affecting the people to choose Islamic banks, they are quality of service, the location of branches, geographical spread, the Bank's reputation and fame, and the ratio of dividends to investment accounts.

Cevik and Charap (2011) did such the research exploring Islamic banks in two Islamic countries, viz. Malaysia and Turkey. With using the monthly data from January 1997 to August 2010, the study concludes that conventional bank deposit rates and PLS return exhibits long-run co-integration and the time varying volatility of conventional bank deposit rates and PLS returns is correlated and is statistically significant. In addition, the pairwise and multivariate causality tests show that conventional bank deposit rates Granger cause returns on PLS accounts.

Concerning the variable of financing in Islamic banking, Kader and Leong (2009) have invistigated the impacts of interest rate towards upon the volume of financing in Islamic banks in Malaysia. The research, by employing the

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data of the Malaysian banking industry from May 1999 to June 2007 and the tools such as VAR, Granger Causality and IRF, concludes that the financing of residential property of Islamic banks (RPFis) seems to respond positively to shocks in RPF of conventional banks and the base lending rate (interest rate). This conclusion indicates that the customers of Islamic banks are profir motivated and their decisions in obtaining BBA financing are induced by the substitution effect based on the movement of the rate BLR. Moreover, when interest rate rises, the BBA financing is more popular, and when it falls, the customers prefer conventional loans rather than Islamic financing. In short, the research results that Islamic bank financing in the dual system is exposed to interest rate risks despite operating on interest free principle.

Another research conducted by Yusoff et al. (2001: 67) indicates the same result as mentioned above. By using Granger Causality test and the data from the Islamic banks in Malaysia, the research indicates that there is a relationship between interest rate and the amount of loan in the Islamic banks in Malaysia. Furthermore, the research finds that the Islamic loan growth of merchant banks are significantly positive towards the growth of overnight Klibor, in which the Granger Causality test shows that fluctuations in loan rates causes fluctuations in loan supply.